Uncommon Cents

One of the things I tell any student of mine is that there are things which are simple, but not easy. It’s simple to tell someone, for instance, what they need to do to lose weight: address your eating (less sometimes but not always) and activity level (more sometimes but not always). Even the details are not that hard to fill in (get a cookbook for a diet you like; choose a form of exercise you can afford, find challenging, and can do conveniently; find a group of people who are helpful in your moving toward your goals). So why do so many folks fail at a goal like this when everything is so simple?

Because simple isn’t easy.

Easy means that no to very little effort needs to go into something. If people could lose weight without doing anything to lose it, they’d be fine. But weight loss is work, which requires discipline, consistency, and planning.

Similarly, improving your financial situation is simple, but not easy. “Spend less than you earn.” Simple? Sure. Easy? Apparently not.

What’s very interesting about this situation is that there are lots and lots of things you can do to make the tasks of personal finance easy, but people don’t take advantage of them. Invest automatically through a tax deferred plan? That’s a 401(k) or equivalent. Pay your bills automatically and on time? That’s called online bill pay. Keep track of your expenses? Try Quicken. Deposit your paycheck into your account automatically? That’s direct deposit. Diversify your stock market holdings? That’s an index fund. These are all easy ways to make your financial life better, but not enough people take advantage of them.

If you’re like me, you’ll want as many ways to make your financial life easy as possible. Take advantage of these ways to make things easy and get your financial life in order. They’re simple–and easy.

Tags: 401(k)s and equivalents, Banking, Social aspects, Technology

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